Closed Shops Become The New Normal One Month After The Madurazo

After a month of Maduro’s new economic measures, what’s life like on the formerly crowded streets of Caracas? Lots of closed shops, and not a lot of hope.

Photo: José Díaz

“Caracas looks like the rest of the country, and the rest of the country looks like a ghost town,” we overheard a lady say in the Sabana Grande Bvd., one of the areas with greater commercial tradition in the Venezuelan capital.

If you look around, there’s only closed stores. It was a regular Monday, except for the fact that it was the day president Nicolás Maduro’s economic package turned a month old.

On September 17, Carmen Contreras, mother of two teenagers (on of them still in elementary school), went to the boulevard to buy a pair of shoes for school and some supplies. It was 2:30 p.m., and even though she’d been looking around for a while, she couldn’t find anything. Sabana Grande was deserted.

“I expected something else, I imagined that after the 15th there’d be more movement, because we have a new salary, but this is dead.”

Juan Contorianos, spokesman of the Sabana Grande Merchant’s Association, explains that the situation is due to store owners that can’t replenish their inventories, and provides us with alarming figures: 600 out of 2,500 businesses remain closed due to issues with foreign currency access.

“That’s a lot of closed shops,” says Carmen. “They destroyed Sabana Grande.”

What about the shops that were open? “BsS. 3,000 for a pair of school shoes. I can’t afford that, not even with credit cards. I haven’t even thought about buying school supplies, the only sovereign thing here is the insult of how much a notebook costs.”

“The reconversion created more poverty. I work hard, and now I don’t know how I’ll send my kid to school, I hope the lab I work at doesn’t go bankrupt.”

Dangerous measures

On August 17, the president revealed a new set of economic measures that include an increased minimum wage, the price of gas (a mystery to this day), the VAT, and a series of agreements with various companies were fixed prices were established for over 30 products of the basic food basket.

Between January and August, the prices hike equals 34,680.7%, while the annual inflation stood at 200,005%, according to the National Assembly’s Delegate Commission.

The only sovereign thing here is the insult of how much a bound notebook costs.

After the paquetazo, between the reconversion and the bolívar soberano implementation, the generalized perception is that prices are out of control. In every queue, in every corner, in each shop, there’s no sense of improvement, just anguish and uncertainty in a population already in despair because of hyperinflation.

Now, this doesn’t affect consumers only. Paying wages is a new concern for smalls business-owners, and many have been forced to fire up to 90% of their payroll, according to Juan Contorianos.

María Carolina Uzcátegui, Consecomercio’s president, says that the cost structure of small and medium enterprises was affected by a 60%.

“That’s the reason why many shops are closed, mainly beauty salons, butcher shops, shoe stores, restaurants, small grocery stores. Higher costs result in no sales, people are now using all of their income to buy food. Venezuelans are only thinking about eating.”

Consecomercio classifies three types of closed enterprises: the company that said “I can’t take it anymore, I’m closing,” the company that closes temporarily and fires staff while they wait for a change, and the company that hasn’t closed but puts up a “clearance” sign. Uzcátegui calculated a 40% of closed stores. Four years ago, the average was 25%.

Caracas’ urban memory is one of the victims, with the foreclosure of arepera El Tropezón, after more than 50 years of commercial life.

Targeted enterprises

Paula Itriago, director of the Venezuelan Chamber of Shopping Malls (Cavececo),was a little more conservative with numbers, talking from 5% to 10% of vacant stores as a general rule.

“What we’re measuring now is the impact of the minimum wage increase in the industry. This is a topic that we’ve worked on, with the uncertainty of the Patria website; we don’t know how workers will enroll in the system.”

I work hard, and now I don’t know how I’ll send my kid to school, I hope the lab I work at doesn’t go bankrupt.

For Cavececo, with 130 thousand affiliates and over 500,000 workers, the hardest part is keeping contractual working agreements and overcoming the massive workforce drain, a problem also present in health and education. Freddy Ceballos, president of the Pharmaceutical Federation of Venezuela (Fefarven), talks about 150 closed pharmacies (today, there’s one pharmacy per every 7,000 inhabitants, when there should be one per every 2,000).

Schools, already struggling with the number of teachers leaving the country (even from public schools), now have to deal with the wage hike.

Fausto Romeo, head of the Private Schools Association, estimates that this year 15% of schools might close. We’re talking around 400 to 500 preschools, elementary schools and high schools that just won’t open their doors.

If malls and boulevards like Sabana Grande used to be windows for consumerism, now the locked doors are the mirror of a crisis that worker and employer suffer from at the same time. It’s the decadence of mismanagement: the collapse of basic services, crime, some avenues deserted while others are packed with pedestrians, since there’s no more public transport.

Caracas sleeps even on weekdays now, and not even the start of the school year makes the future less grim.

Mabel Sarmiento

Mabel Sarmiento is an UCAB-trained journalist with more than 20 years' experience covering community news, the environment, health, education and infrastructure.